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EANS-News: Oxea GmbH
Oxea Sarl reports strong third quarter results
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- quarterly report/Q3 2010 Luxembourg (euro adhoc) - Third quarter highlights: >> Net sales were EUR367.2 million, up 52% from the prior year period >> Operating Result was EUR77.6 million versus EUR20.7 million in the prior year period >> Net Income was EUR50.4 million versus EUR5.0 million in the prior year period >> Adjusted EBITDA was EUR46.5 million versus EUR29.0 million in the prior year period Oxea Sarl, a leading global supplier of Oxo Intermediates and Oxo Derivatives, today announced third quarter net sales of EUR367.2 million, a 52% increase from the same period last year. Oxea's strong performance in the third quarter demonstrates the robustness of the business model. Recovery in the US and European regions coupled with continued strong demand from Asia contributed to the excellent results. Q3 2010 Adjusted EBITDA at EUR46.5 million, and an Adjusted EBITDA margin of 12.7%, reflects an excellent performance for Oxea and underlines the strong relationships with customers and the valuable contribution of Oxea's employees to the success of the business. After the recent refinancing, net debt is around 2.9x EBITDA as a result of the current trading. In EUR million - Unaudited Three months ended Nine Months ended September 30, September 30, 2010 2009 2010 2009 Net Sales 367.2 240.9 1,014.1 641.8 Gross Profit 56.7 28.2 145.5 67.6 SG&A (13.9) (8.2) (35.9) (22.8) R&D (1.3) (2.1) (4.2) (6.1) Other operating income/(expense) 36.1 2.8 40.1 3.8 Operating Result 77.6 20.7 145.6 42.5 Net Income 50.4 5.0 86.8 11.4 Adjusted EBITDA 46.5 29.0 133.5 70.8 Sales Sales for the three months ended September 30, 2010 were EUR367.2 million, a 52% increase compared with the corresponding period of the prior year. The increase was driven by an increase of 14% in total volumes, improved product mix and the pass through of higher raw material costs to customers. The volume increase was particularly strong in our Oxo Derivatives segment, where volumes were some 29% higher than in the prior year period. Volumes in the Intermediates segment were some 11% higher than in the prior year period. EUR181.5 million of our revenues for the three months ended September 30, 2010, resulted from sales in Europe, EUR113.2 million in NAFTA and EUR72.5 million in the rest of the world compared to EUR122.9 million, EUR75.9 million and EUR42.1 million respectively in the prior year period. Gross profit Gross profit for the three months ended September 30, 2010 increased by 101% to EUR56.7 million compared with EUR28.2 million in the corresponding period of the prior year. The increase of EUR28.5 million was attributable to higher volumes in both Oxo Intermediates and Derivatives segments and improved margins which more than offset the increase in raw materials and manufacturing fixed costs such that gross profit increased to 15.4% of sales compared with 11.7% in the corresponding period of the prior year. Selling general & administration expense (SG&A) SG&A expense for the three months ended September 30, 2010 increased to EUR13.9 million compared with EUR8.2 million in the corresponding period of the prior year. The increase is primarily attributable to higher consulting fees in relation to projects, increased selling costs associated with higher volumes, and higher personnel costs including salary increases and accruals for employee bonuses. Other operating income/(expense) Net other operating income for the three months ended September 30, 2010 amounted to EUR36.1 million compared with EUR2.8 million in the corresponding period of the prior year. The increase is primarily attributable to gains on the divestiture of the syngas and LDPE units in Oberhausen and the sale of shares in one group entity. The net gain from these transactions amounted to EUR39.7 million and is partly offset by lower income from site services. Operating result Operating result for the three months ended September 30, 2010 was EUR77.6 million compared with EUR20.7 million in the corresponding period of the prior year period as a result of increased volumes and improved operating margins and net gains of some EUR39.7 million on divestitures partly offset by increased operating costs. Net Income Net income was EUR50.4 million compared with EUR5.0 million in the corresponding period of the prior year as a result of the improvement in margins and higher sale volumes, net gains on divestitures with a corresponding increase in operating profit offset by higher interest expense arising from the recent refinancing and higher income taxes. Adjusted EBITDA Adjusted EBITDA was some EUR46.5 million compared with EUR29.0 million in the corresponding period of the prior year driven by the improved volumes and improved operating margins. Cash Flow The company continued to generate positive free cash flow and during the first nine months of 2010 Oxea generated EUR44.8 million in cash from operating activities compared with EUR46.5 million in the corresponding period of the prior year. The increased earnings were offset by higher trade working capital due to higher trading activity, higher inventory costs and the maintenance turnaround in Bay City. Cash provided by investing activities was EUR57.4 million compared with a utilisation of EUR12.2 million in the corresponding period of the prior year driven by proceeds from divestitures in the amount of EUR79.0 million partly offset by an increased level of capital expenditure. Cash used in financing activities was EUR175.8 million compared with EUR28.8 million in the corresponding period of the prior year whereby proceeds of some EUR505.7 million from the recent bond issue were used to repay existing bank debt and shareholder loans. Oxea is a global manufacturer of Oxo intermediates and derivatives such as alcohols, polyols, carboxylic acids, specialty esters and amines. These products are sold in the merchant market (where sales are to third party customers) and used for the production of high-quality coatings, lubricants, cosmetic and pharmaceutical products, flavorings and fragrances, printing inks and plastics. In the 12 months ending September 2010, Oxea generated revenue of about EUR1.3 billion with approximately 1,330 employees in Europe, the Americas and Asia. Forward looking statements * This document contains financial information regarding the businesses and assets of OXEA S.à r.l. (the "Company") and its consolidated subsidiaries (the "Group"). Such financial information has not been audited, reviewed or verified by any independent accounting firm. The inclusion of such financial information in this document or any related presentation should not be regarded as a representation or warranty by the Company, any of its respective affiliates, advisors or representatives or any other person as to the accuracy or completeness of such information´s portrayal of the financial condition or results of operations by the Group. * This document may contain information, data and predictions about our markets and our competitive position. While we believe this data to be reliable, it has not been independently verified, and we make no representation or warranty as to the accuracy or completeness of such information set forth in this document. Additionally, industry publications and reports from which such information, data or predictions may be obtained generally state that the information contained therein has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and in some instances state that they do not assume liability for such information. We cannot therefore assure you of the accuracy and completeness of such information and we have not independently verified such information. In addition, we have made statements in this document regarding our industry and position in the industry based on our experience and our own investigation of market conditions. We cannot assure you that the assumptions underlying these statements are accurate or correctly reflect the state and development of, or our position in, the industry, and none of our internal surveys or information has been verified by any independent sources. * Certain statements in this document are forward-looking. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. These factors include, among others: the cyclical and highly variable nature of our business and its sensitivity to changes in supply and demand; adverse and uncertain global economic conditions; the highly variable nature of raw materials costs and any loss of key suppliers or supply shortages or disruptions; the competitive nature of our industry; the ability to comply with current or future laws and regulations relating to environmental, health and safety matters as well as the safety of our products, related costs of maintaining compliance and addressing liabilities as well as risks relating to compliance with antitrust and tax laws; our reliance on a limited number of suppliers for certain of our key raw materials; operational risks, including the risk of environmental contamination and potential product liability claims; operational interruptions at our facilities due to events that are outside of our control such as severe weather conditions, unscheduled downtimes, terrorist attacks, natural disasters or other events that may interrupt or damage our operations or the impact of scheduled outages on our results of operations; the risk that our insurance coverage may not be sufficient to cover all risks; risks relating to the global nature of our operations, including, among others, fluctuations in exchange rates; the loss of major customers or key customers for certain of our products; the loss of key personnel; risks relating to acquisitions and dispositions, including any impairment risks with respect to historical acquisitions, our ability to successfully integrate acquired businesses, and unexpected liabilities relating to such acquisitions or contingent liabilities in connection with such dispositions; the requirement to make further contributions to our pension schemes; the failure to protect our intellectual property rights; limitations on our ability to adjust the quality of certain products that we manufacture; and potential conflicts of interests with our principal shareholder. * These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. New risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Neither the Company nor the Group undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. Use of non IFRS financial information: * EBITDA is defined as net income for the year before financial result, income taxes, depreciation and amortization. EBITDA, is a supplemental measure of our performance and liquidity that is not required by or presented in accordance with IFRS. EBITDA is not a measurement of our financial performance or liquidity under IFRS and should not be considered as an alternative to profit for the period presented, results from operating activities or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities as a measure of our liquidity. We believe EBITDA facilitates operating performance comparisons from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of change in effective tax rates or net operating losses) and the age and book value and amortization of tangible and intangible assets (which have an effect on related depreciation expense). We also present EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of similar issuers, the majority of which present EBITDA when reporting their results. Finally, we present EBITDA as a measure of our ability to service our debt. * Adjusted EBITDA is defined as EBITDA adjusted to remove the effects of certain non-cash and non-recurring expenses and charges. Adjusted EBITDA is a supplemental measure of our performance and liquidity that is not required by or presented in accordance with IFRS. Adjusted EBITDA is not a measurement of our financial performance or liquidity under IFRS and should not be considered as an alternative to profit for the period presented, results from operating activities or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities as a measure of our liquidity. We believe Adjusted EBITDA facilitates operating performance comparisons from period to period and company to company by eliminating certain non-recurring expenses and charges. We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of similar issuers. Finally, we present Adjusted EBITDA as a measure of our ability to service our debt. end of announcement euro adhoc -------------------------------------------------------------------------------- Further inquiry note: Neil Robertson Managing Director (Finance, IT) email@example.com Birgit Reichel Global Communications firstname.lastname@example.org Branche: Chemicals ISIN: XS0523636594 WKN: A1AY4T Börsen: Frankfurt / Open Market